Created by Shivani Bhakal from IIT Roorkee b.tech 2 year student, during a marketing internship under Prof. Sameer Mathur.

1. Launching Krispy Natural:
Cracking the Product
Management Code
Harvard Business School Case

2. What are Pemberton Products?
Pemberton was the snack food division of Candler
Enterprises, a multinational beverage and snack goods
manufacturer.

3. What is Krispy Naturals?
Who all are involved?

4. Main characters in this case study .
• Ashley Marne:- Executive vice president of sales and marketing at
Pemberton Products
• Brandon Fredrick:- Marketing director for Pemberton
• Burt Spivey:- Pemberton Chief Operating Officer
• Patricia Williams:- Pemberton’s President

5. What are the conclusions drawn till now?

6.  Market tests in Columbus, Ohio as well as three
cities in the Southeast were taken.
 Columbus market share results were double.
 Pemberton had achieved a compounded
annual growth rate (CAGR) of 14% for revenue
over the past five years.

7. Pemberton’s income as a percent of sales for
2011 was:

8. Optimal strategies adopted for
Achievements ??
it’s
and what about

9.  Pemberton utilized a company-owned direct
store delivery (DSD) distribution system in
which products were delivered directly to retail
outlets, bypassing retailer’s warehouses and
distribution centres.
 DSD maximized sales and profit growth
through greater control of shelf space, more
accurate forecasting, reduced stock-outs, and
quicker turnover of products.

10. What was the estimated DSD system cost to Pemberton ?
approximately 20
cents
of every sales
dollar.

11. Three key strategic priorities for the company:
I. Building a collection of attractive, durable brands.
II. Leveraging leading marketing, sales and DSD systems to increase
revenue and profits.
III. Building or acquiring capabilities in salty snack categories.

12. Who are the major competitors in the space?
Let’s find out !!!

13. The top three U.S. cracker manufacturers
were :
1. Kraft Food Inc.
2. Kellogg Co
3. Pepperidge Farm

14. • It was reported that 74% of respondents consumed crackers on a
regular basis and 34% ate them as part of regular weekly diet.
• The study also revealed that standalone flavour (i.e., without toppings
or dips) was the number one criterion in cracker purchase decisions,
and over half of the respondents liked crackers that were
conveniently packaged in easily portable quantities.
• The Mintel study reported that 53% of respondents considered
overall healthfulness an important factor in their cracker purchase
decisions.
Study analysis : Mintel study of salty snacks in US

15. Manufacturer sales of "All Other" Crackers :

16. Krispy Product Line:
• Krispy Single-Serve operated three production plants.
• The flagship product was a package containing six round toasted
cracker sandwiches with cheese filling, available in 3 flavour options.
• The product fell short of management projections.

17. What could be the reason for such
underperformance?

18. the limited product line, which made it difficult to command any sort
of presence in supermarkets.
In addition, a taste survey showed the product did not deliver the
flavor satisfaction scores we expected

19. Krispy Relaunch:
First, Pemberton R&D labs were engaged to improve the product
taste and quality. This would lead to a rebranding of the product to
Krispy Natural.
In addition, the product line would be extended beyond single-serve
offerings.
specific marketing strategies were adopted:

20. did Krispy Natural adopted?
What market

21.  The product strategy for Krispy Natural focused on increasing package
sizes to multiple-servings and improving taste so that consumers would
prefer Krispy Natural
 However, the company was still in the process of optimizing the system
to account for the longer shelf life of crackers versus baked goods and
cookies.
 Management felt pricing of approximately 155% the category average
cost per ounce was reasonable considering the product’s superiority.
 Pemberton’s marketing approach for Softies cookies had emphasized
heavy advertising and promotion to the end consumer as well as
appealing to the trade.
 Price discounts were pervasive in the industry with trade spending often
representing 10–20% of sales.

22. Advertising Spending for Leading Cracker Brands:

23. What was the promotional plan for 2011 ?

25. It provides test market result highlights for store and
display penetration, test market share estimates, and two
scenarios for annualized national sales projections based
on test market performance.

26. That was all about the case study.

27. Created by : Shivani Bhakal
during a marketing
internship under Prof.
Sameer Mathur (IIM
Lucknow) Prof. Sameer Mathur